Well everything needs handling carefully and notes should be taken, emails are a good way of ensuring everything is documented.
The car aspect of things may be irrelevant, it can be difficult selling company assets and ensuring that a benefit in kind is taxed correctly. As long as they were still making appropriate tax deductions for the ongoing use of the car nothing was done wrong here.
So now you have to decide is he fit to do his job, and if not can any reasonable adjustment be made to accommodate his disability. If the answer to either of these is no then he should either resign or be dismissed.
Of course correct procedure must be followed and your solicitor should be able to look for errors in the process and make a claim for wrongful dismissal if the procedures aren't followed to the letter.
I've just noticed Lyn's post which does get to the heart of the matter. Why can he not resume his normal role? And assuming there is an answer to that, what reasonable adjustment could be made to allow him to continue in his job. I know working from home may be an adjustment but it may not be reasonable from the employers point of view.